United States District Court, D. Maryland
TYLER JOHNSON, et al., Individually and on behalf of similarly situated employees
HELION TECHNOLOGIES, INC.
DEBORAH K. CHASANOW UNITED STATES DISTRICT JUDGE
pending in this employment collective action was the joint
motion for approval of acceptance of offer of judgment and
entry of judgment filed by Defendant Helion Technologies,
Inc., and Plaintiff Tyler Johnson. (ECF No. 45). The court
denied the motion because the parties failed to provide any
information to support the requested attorneys' fees and
costs. (ECF No. 46, at 7-8). The parties then jointly filed a
supplemental memorandum in support of their joint motion for
approval of acceptance of offer of judgment and entry of
judgment. (ECF No. 50). The issues have been briefed, and the
court now rules, no hearing being deemed necessary. Local
Rule 105.6. For the following reasons, the motion, as
supplemented, will be granted.
Tyler Johnson and James Phelan, filed a complaint on behalf
of themselves and those that are similarly situated on
October 23, 2018. (ECF No. 1). The complaint alleges that
Defendant “improperly classified them as exempt
employees and/or failed to pay them overtime wages in
violation of the” Fair Labor Standards Act
(“FLSA”), 29 U.S.C. § 201 et seq.;
the Maryland Wage and Hour Law (“MWHL”), Md.Code
Ann., Lab. & Empl. § 3-401, et seq.; and
the Maryland Wage Payment and Collection Law
(“MWPCL”), Md. Code, Lab. & Emp. § 3-501
et seq. (ECF No. 45-1, at 2).
August 12, 2019, Defendant's counsel sent Plaintiff
Johnson's counsel an Offer of Judgment. (ECF No. 45-1, at
2). The offer proposed “to allow judgment to be entered
against Defendant, and in favor of Plaintiff Johnson, in the
total amount of $31, 500.00, inclusive of attorneys[']
fees and costs, $5, 250.00 of which shall be wages, $5,
250.00 of which shall be liquidated damages, and $21,
000[.00] of which shall be attorneys['] fees[.]”
(ECF No. 45-2, at 1). Plaintiff Johnson, through counsel,
accepted the offer on the same day. (ECF No. 45-1, at 2).
Plaintiff Johnson's acceptance “indicate[d] that it
is conditioned on [Defendant] dismissing with prejudice the
action which [Defendant] has initiated against [Plaintiff
Johnson] in the Circuit Court for Baltimore County,
Helion Technologies, Inc. v. Johnson, No.
03-C-18-012051 (the ‘State Court Action'), and
[Defendant] has agreed to that condition.”
Hazel outlined the proper interplay between the FLSA and Rule
68 in Banegas v. Gen. Lawn Serv. Corp., No.
13-cv-3728-GJH, 2014 WL 12740666, at *1 (D.Md. July 17,
Federal Rule of Civil Procedure 68(a) instructs the court to
enter judgment after receiving an accepted offer of judgment.
However, the [FLSA] . . . does not permit settlement or
compromise except with (1) supervision by the Secretary of
Labor or (2) a judicial finding that the settlement reflects
“a reasonable compromise of disputed issues”
rather than “a mere waiver of statutory rights brought
about by an employer's overreaching.”
Lynn's Food Stores, Inc. v. U.S., 679 F.2d 1350,
1354 (11th Cir. 1982); see also Lopez v. NTI,
LLC, 748 F.Supp.2d 471 (D.Md. 2010) (explaining that
courts assess FLSA settlements for reasonableness).
Accordingly, the FLSA modifies Rule 68(a) such that in claims
filed under the FLSA, the court will enter judgment when
presented with an offer and acceptance only after the court
is satisfied that the settlement is a reasonable compromise.
the United States Court of Appeals for the Fourth Circuit has
not directly addressed the factors to be considered in
deciding whether to approve such settlements, district courts
in this circuit typically employ the considerations set forth
by the United States Court of Appeals for the Eleventh
Circuit in Lynn's Food Stores. See,
e.g., Duprey v. Scotts Co. LLC, 30 F.Supp.3d
404, 407-08 (D.Md. 2014); Lopez, 748 F.Supp.2d at
478. An FLSA settlement generally should be approved if it
reflects “a fair and reasonable resolution of a
bona fide dispute over FLSA provisions.”
Lynn's Food Stores, 679 F.2d at 1355. Thus, as a
first step, the bona fides of the parties'
dispute must be examined to determine if there are FLSA
issues that are “actually in dispute.”
Id. at 1354. Then, as a second step, the terms of
the proposed settlement agreement must be assessed for
fairness and reasonableness, which requires weighing a number
of factors, including:
(1) the extent of discovery that has taken place; (2) the
stage of the proceedings, including the complexity, expense
and likely duration of the litigation; (3) the absence of
fraud or collusion in the settlement; (4) the experience of
counsel who have represented the plaintiffs; (5) the opinions
of counsel. . .; and (6) the probability of plaintiffs'
success on the merits and the amount of the settlement in
relation to the potential recovery.
Hackett v. ADF Rest. Investments, 259 F.Supp.3d 360,
365 (D.Md. 2016) (quoting Saman v. LBDP, Inc., No.
12-cv-1083-DKC, 2013 WL 2949047, at *3 (D.Md. June 13,
2013)); see also Duprey, 30 F.Supp.3d at 408, 409.
Finally, where a proposed settlement of FLSA claims includes
a provision regarding attorneys' fees, the reasonableness
of the award must also “be independently assessed,
regardless of whether there is any suggestion that a
‘conflict of interest taints the amount the wronged
employee recovers under a settlement agreement.'”
Lane v. Ko-Me, LLC, No. 10-cv-2261-DKC, 2011 WL
3880427, at *3 (Aug. 31, 2011) (citation omitted).
court previously determined that a bona fide dispute
exists, (ECF No. 46, at 5) and that the offer of judgment
appears to be a fair and reasonable compromise of the
parties' bona fide dispute (Id., at
5-6). However, the parties failed to provide any information
to support the requested $21, 000.00 attorneys' fees and
costs. (Id., at 7). The court accordingly denied the
joint motion for approval of acceptance of offer of judgment
without prejudice. (Id., at 7-8). The parties'
supplemental briefing addresses the joint motion's
deficiencies and the reasonableness of the attorneys'
fees and costs may now be assessed.
assess “the reasonableness of the fee, courts typically
refer to the principles of the traditional lodestar method as
a guide[.]” Hackett, 259 F.Supp.3d at 367
(internal citations omitted). The starting point in the
lodestar calculation is multiplying the number of hours
reasonably expended by a reasonable hourly rate. Robinson
v. Equifax Info. Servs., LLC, 560 F.3d 235, 243
(4th Cir. 2009). “An hourly rate is
reasonable if it is ‘in line with those prevailing in
the community for similar services by lawyers of reasonably
comparable skill, experience, and reputation.'”
Duprey, 30 F.Supp.3d at 412 (quoting Blum v.
Stenson, 465 U.S. 886, 890 n.11 (1984)). This court has
established presumptively reasonable rates in Appendix B to
its Local Rules.
parties propose that “$21, 000.00 is an appropriate
amount of attorney's fees and costs to allocate to work
performed on behalf of [Plaintiff] Johnson in this
matter.” (ECF No. 50, at 1). The parties explain that
“[a]t the time the [o]ffer was made, a total of 394.43
hours were spent by Plaintiff[s'] counsel in preparing
the case, which equates to $89, 975.42 in fees.”
(Id.). The parties elaborate that when they
previously negotiated a Rule 68 offer for Plaintiff Willis,
they agreed that Defendant would pay one fourth of the fees
and costs because there were four plaintiffs in the case.
(Id., at 2). They “agreed to abide by the same
formula” when “negotiating the amount of fees
and costs attributable to” Plaintiff Johnson, even
though there are now only three plaintiffs in the action and
the proper calculation would be to take one third of the fees
and costs. (Id.). “[A] quarter of the total
fee equates to $22, 493.86” and the parties
“further agreed to reduce the [amount] to $21,
000.00.” (Id.). ...